Friday PM October 30th, 2009
by: Ed Mayberry, October 30, 2009 8:10:25 pm
The Occupation Safety and Health Administration is issuing an $87 million fine against BP for failing to correct safety hazards identified after the 2005 explosion that killed 15 people and injured 170 at its Texas City refinery. That's after a six-month inspection revealed hundreds of violations of a 2005 agreement to repair hazards at the refinery. OSHA Acting Assistant Secretary Jordan Barab says BP was issued 271 notifications for failing to make corrections over the four-year period since the explosion."Well, we're certainly disappointed. I can't say we're totally surprised. We've been back to that plant 17 times since 2005. We've been in lots of discussions with BP. We have identified lots of the health and safety problems at the plant that we've found. This is not just OSHA identifying these problems. We have enlisted many of the top refinery experts in the country to look at this plant. After the original explosion, both the Chemical Safety Board and the Baker Commission identified some serious systemic safety and health problems at this plant. I think the problems that we've found in the plant indicate that this plant still has some pretty serious systemic safety and health problems."
The British oil giant is contesting the fine. A BP spokesman says the company believed it was in "full compliance" with the settlement and will continue to work with government officials to resolve the issue. The company says it has been in discussion with OSHA often over the life of the agreement, making clear what could be completed and what could not be completed before September 2009. Much of the work requires long lead times, requiring upfront engineering and unit shutdowns to complete.
Consumer spending plunged in September by the largest amount in nine months, reflecting the end of the government's cash for clunkers auto sales program. Incomes, the fuel for future spending, were flat. While the government reported that the overall economy grew in the July-September period, signaling the end of the worst recession in seven decades, the weakness in spending and incomes as the quarter ended underscores the fragility of the recovery. The Commerce Department says spending dropped 0.5 per cent in September, matching economists' expectations. Personal incomes were unchanged as workers contend with rising unemployment and a squeeze on wages.
One private economist says it's going to be a "struggle" for consumers to increase spending--because incomes are "so soft." The comment from Ian Shepherdson of High Frequency Economics comes as the government reports that consumer spending fell by the biggest amount in nine months last month. The decline reflected the end of the government's cash for clunkers program. But with incomes flat, chances of a rebound in spending in the next few months are considered shaky. And economists are worried that if households cut back on spending to cope with continuing financial pressures, the economic recovery could falter. Just yesterday, the government reported that the economy grew at an annual rate of 3.5 percent in the summer. But the concern is that much of that growth stemmed from temporary government programs like the auto sales initiative. Some economists think consumer spending will slow sharply in the current quarter, lowering GDP growth to perhaps 1.5 per cent. And analysts say they can't rule out the possibility of a double-dip recession over the next year.
Employment costs have risen by the smallest amount on record in the year ended in September, as high unemployment is keeping a lid on wage and benefit growth. The data shows that employers face little pressure to raise pay, even as the economy recovers. The weak labor market makes it difficult for people with jobs to demand higher pay and benefits. The Labor Department said that the cost of wages, health care and other benefits increased by 1.5 per cent in the 12 months ending in September. That is the smallest increase since records of that data have been kept starting in June 1982. The rise is down from a 2.9 per cent advance in the 12 months ending in September 2008. The department's employment cost index rose by a seasonally adjusted 0.4 per cent in the July-September quarter, matching analysts' expectations.
Sam Houston Race Park is holding a job fair tomorrow from 10 a.m. to 2 p.m. on North Sam Houston Parkway West. They're hoping to staff approximately 250 employees for the Thoroughbred meet taking place November 2009 through April 2010. The job fair will feature on-site interviews for seasonal positions such as event operations, sales, admissions, parking, security and other jobs.
Banks trimmed their borrowing from the Federal Reserve's emergency lending program over the past week, evidence that some credit problems are easing as the economy recovers. The Fed says commercial banks averaged $22.6 billion in daily borrowing over the week that ended Wednesday. That's down from $23.8 billion in the week ended October 21st, and much lower than $112 billion a year ago at the height of the financial crisis.
The nonprofit body that oversees Internet addresses has approved the use of Hebrew, Hindi, Korean and other scripts not based on the Latin alphabet in a decision that could make the Web dramatically more inclusive. The board of the Internet Corporation for Assigned Names and Numbers has voted to allow such scripts in so-called domain names at a meeting in South Korea's capital. The decision was widely expected and follows years of debate and testing. It clears the way for governments or their designees to submit requests for specific names, likely beginning November 16th. ICANN officials say Internet users could start seeing them in use early next year, particularly in Arabic, Chinese and other scripts in which demand has been among the highest.
The number of rigs actively exploring for oil and natural gas in the U.S. this week rose by 21 this week to 1,069. Houston-based Baker Hughes said that 728 rigs were exploring for natural gas and 330 for oil. Eleven were listed as miscellaneous. A year ago this week, the rig count stood at 1,971. Texas gained 13 rigs. The rig count tally peaked at 4,530 in 1981, during the height of the oil boom. The industry posted a record low of 488 in 1999.